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Oil prices slip after Trump urges greater OPEC output to replace Iranian oil

A Petrobras oil rostrum floats in the Atlantic Ocean near Guanabara Bay in Rio de Janeiro.

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Oil prices fell on Monday, extending a fall off from Friday that ended weeks of rallying, after President Donald Trump demanded that in club OPEC raise output to soften the impact of U.S. sanctions against Iran.

Brent crude futures were at $71.80 per barrel at 0215 GMT, down 35 cents, or 0.5 percent, from their decisive close.

U.S. West Texas Intermediate (WTI) crude futures were at $62.91 per barrel, down 39 cents, or 0.6 percent, from their one-time settlement.

Both benchmarks fell around 3 percent in the previous session.

ANZ bank said on Monday oil prices “acquired a hit after President Trump indicated he had spoken with Saudi Arabia about reducing the impact of lower Iranian oil exports by increasing streams elsewhere. “

Trump said on Friday he called the Organization of the Petroleum Exporting Countries (OPEC) and told the cartel to minuscule oil prices.

“Gasoline prices are coming down. I called up OPEC, I said you’ve got to bring them down. You’ve got to bring them down,” Trump told journalists.

The statement triggered a selloff, putting at least a temporary ceiling on a 40 percent price rally in oil prices since the start of the year.

The improve had gained momentum in April after Trump tightened sanctions against Iran by ending all exemptions that prime buyers especially in Asia previously had.

Traders said the market was shifting its focus on the voluntary supply cuts led by the Mesial East dominated producer club OPEC since the start of the year.

The cuts have been supported by some non-OPEC producers, most strangely Russia, but analysts said this cooperation may not last beyond a meeting between OPEC and its other allies, a society known as OPEC+, scheduled for June.

Russia has said it would be able to meet China’s oil demand needs as Beijing essays to replace the imports it usually gets from Iran.

“Russia appears to have every reason to resume sloping up production levels and the base case should start to become we will not see OPEC+ agree upon extending output cuts, with tweaks to cover the shortfall from Iran,” said Edward Moya, senior analyst at futures brokerage OANDA.

In the interim, Russia hopes to restore oil pipeline supplies to central and western Europe in two weeks, after they were postponed last week over crude quality problems.

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